High Court upholds legality of the UK’s new Greenhouse Gas Emissions Trading Scheme

Cases

The High Court has handed down judgment in Elliott-Smith v Secretary of State for Business, Energy and Industrial Strategy [2021] EWHC 1633 (Admin), a significant environmental law case on the relevance of the Paris Agreement to the energy sector.

The Claimant, a waste industry expert and environmental consultant, challenged the omission of waste incinerators from the scope of the UK Emissions Trading Scheme (UK ETS) and the high level of emissions permitted by the ‘cap’ on the scheme (which is set at the equivalent of 156 million tonnes of CO2 for 2021, above the projected ‘business as usual’ emissions of 126-131 million tonnes). The Claimant argued that the Defendants (the UK Government and Devolved Administrations) had failed lawfully to have regard to Articles 2 and 4.1 of the Paris Agreement and had not acted for or achieved the statutory purpose of the enabling power (in s.44 of the Climate Change Act 2008) when designing the UK ETS.

The Court accepted that the Paris Agreement was a relevant consideration for domestic decisions that affect the climate but afforded discretion to the Defendants’ interpretation of Articles 2 and 4.1. Dove J held that the Defendants had accounted for a “tenable” interpretation of those articles, which is all domestic law required when an unincorporated international treaty was a relevant consideration, and on that basis dismissed the Claimant’s challenge on the first ground.

The Court also held that the Defendants acted consistently with the statutory purpose in s.44 (which was to establish a trading scheme with the aim of “limiting or encouraging the limitation” of greenhouse gas emissions). Dove J rejected the Claimant’s argument that the legislative intent of this section was for a trading scheme that would reduce emissions (as opposed simply to setting a cap or boundary on them).

The judgment is the first to consider s.44 of the Climate Change Act 2008, and is the latest in a growing body of climate-related litigation on the relevance of the Paris Agreement to domestic policy measures intended to tackle climate change.

Ben Mitchell acted for the Claimant, instructed by Rowan Smith of Leigh Day and led by David Wolfe QC.

Andrew Sharland QC acted for the Second Defendant, the Department for Agriculture, Environment and Rural Affairs Northern Ireland, instructed by the Government Legal Department.